This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Agricultural Experiment Station, Kansas State University, Manhattan, Walter R. Woods, Director
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
CONTENTS
page
INTRODUCTION
Objectives
PROCEDURES
Representative Farm
Economic Model
Costs and Returns for Irrigation Regimes
Energy Use and Conservation
RESULTS
Costs and Returns for Irrigation Regimes
Effects of Natural-Gas Prices
Effects on Income
Effects on Total Land Irrigated
High Commodity Prices
Low Commodity Prices
Effects on Water Pumped
High Commodity Prices
Low Commodity Prices
IMPLICATIONS
SUMMARY
REFERENCES
TABLES
FIGURES
APPENDIX
The authors wish to thank Gordon Carriker and Penelope Diebel
for their comments that greatly improved the final draft. Any
errors or omissions remain the responsibility of the authors.
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Effects of Energy and Commodity Prices on Irrigation
in the Kansas High Plainsl
Orlan Buller and Jeffery Williams2
ABSTRACT
An increase in the price of natural gas or of other energy
sources can have a major impact on irrigators’ net income and the
economy of western Kansas. Irrigation is energy intensive, and
approximately one-third of the harvested acres in western Kansas
are irrigated. Some irrigation probably can be sustained for the
life of wells and equipment at a natural gas price of $5.00/mcf
(1990 dollars), but net income would be greatly reduced.
At a
price of $5.00/mcf (1990 dollars), irrigated acreage and water
pumped declines sharply, and without favorable commodity prices,
irrigation is unprofitable except for wells of about 150 feet deep
or less. At a price above $2.00/mcf (1990 dollars), corn acreage
begins to dramatically decrease and is replaced with wheat and
grain sorghum plantings. Higher commodity prices (target price
levels for government farm program crops) can offset an increase
in the price of natural gas. Some irrigation could continue until
the natural gas price rises to $7.00/mcf (1990 dollars); however,
irrigation practices would be very different from present ones.
No corn would be irrigated and very few acres of wheat and grain
sorghum would be irrigated. Development of new wells and land
preparation would not be economically feasible.
l
contribution no. 91-167-S from the Kansas Agricultural Experiment
Station.
2
Professors, Department of Agricultural Economics, Kansas State
University, Manhattan, KS 66506-4011.
1
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has been archived. Current information is available from http://www.ksre.ksu.edu.
INTRODUCTION
Energy prices have a large impact on the cost and income of irrigated
crops in the Great Plains because irrigation in this region is energy
intensive. Many irrigators in western Kansas have experienced steadily rising
prices for natural gas since the mid 1970’s resulting in higher irrigation
costs. For example, the per acre cost of irrigating corn with gravity-flow
irrigation has increased from 5 percent of the total variable production cost
in 1978 to 11 percent in 1988. For center-pivot irrigation, the pumping cost
increased from 9 percent of the total variable costs in 1978 to 19 percent in
1988. Rising energy prices have a greater effect on the cost of irrigating
those crops that use larger amounts of water. Increasing energy prices can
affect the number of acres irrigated, the type of crop irrigated, and the
amount of water pumped.
Nearly one-third of the harvested acres of western Kansas are irrigated.
The value of production historically has been much higher from an acre of
irrigated crops than from nonirrigated. An increase in the price of natural
gas or of another energy source can cause a reduction in irrigated acres, in
the value of production, and in an irrigators’ net income. A change that
diminishes the amount of irrigation also diminishes the agricultural economy
of western Kansas.
Since 1975, farmers in the three crop-reporting districts of western
Kansas have irrigated more than 2 million acres each year, of which
approximately 80 percent was in corn, wheat, or grain sorghum (1). In 1976,
when irrigated corn acreage was at an all time high, it accounted for
approximately 50 percent of the total irrigated acres and was about 150
percent of the combined acreage of wheat and sorghum. After 1976, a sharp
decline in irrigated corn acreage occurred. Irrigated wheat and grain sorghum
acreage increased, while total irrigated acreage remained nearly constant. By
1984, irrigated corn acreage had declined to less than 20 percent of total
irrigated acreage and less than half the combined acreage of irrigated wheat
and grain sorghum. Since 1984, acreage shifts among the three crops have
continued, but irrigated corn acreage has increased relative to irrigated
wheat and grain sorghum acreage. Irrigated acreage has declined 40 percent
for grain sorghum and 23 percent for wheat since 1984. Total irrigated acres
for corn, wheat, and grain sorghum have declined 23 percent since then. The
prices of energy and commodities, as well as changes in government programs,
are believed to be major causes of the change in irrigated crop acres (2).
Objectives
The purpose of this study was to estimate the effect of an increase in
the price of natural gas on the number of acres irrigated, amount of water
pumped, and net income at the farm level. These relationships were studied
using an economic model of a representative irrigated farm in western Kansas.
This representative farm produces irrigated corn, wheat, and grain sorghum
using gravity-flow and center-pivot irrigation systems on owned and rented
land.
2
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has been archived. Current information is available from http://www.ksre.ksu.edu.
The focus of this study was on the effect of changes in the price of
natural gas; however, a procedure to transform the natural gas price to that
of other sources of energy was provided. Thus, the results using natural gas
can be adapted to other energy types.
PROCEDURES
Representative Farm
Land and water characteristics of the representative farm were averages
of the resources reported for the group of 65 irrigation farms in the
southwest Kansas Farm Management Association in 1986 (3). The average crop
acreage of the 65 irrigation farms was 2472 acres including fallow, of which
1554 were nonirrigated and 918 acres were irrigated. Of the 2472 crop acres,
808 acres were estimated to be owned; of the 918 acres irrigated acres, 248
were estimated to be owned and 658 acres were estimated to be irrigated with
the gravity-flow system. Nonirrigated land was planted to wheat and grain
sorghum.
We assumed that the representative farm has irrigation wells with a 900
gallons per minute (GPM) flow rate and 225 feet of water lift, that the
gravity-flow irrigation systems have a farm irrigation efficiency of 65
percent, and that the center-pivot systems have a farm irrigation efficiency
of 85 percent. A farm irrigation efficiency of 65 percent means that 65
percent of the water pumped was used by the crop to produce dry matter,
including grain and 35 percent was lost by evaporation, runoff, and deep
percolation. The feet of water lift and flow rate of the well for the
representative farm were averages for irrigated farms and were based on the
hydrology of western Kansas as reported in test well measurements. Appendix
tables A-1, A-2, and A-3 report depth to water, depth to bedrock, and
saturated thickness as measured in test wells in specified counties in 1988.
Annual rainfall, which is highly variable in the region, influences the amount
of water pumped. Average annual rainfall of 17.5 inches was assumed for the
entire year. Rainfall plus irrigation provide the soil water needed for plant
growth and grain production.
Economic Model
An economic model of the representative farm was developed to find the
most profitable combination of irrigated crops and water use (4). The model
included nine irrigation regimes for corn, nine for grain sorghum, and seven
for wheat to represent an irrigator’s choices for selecting the crop and
amount and schedule of water use. Irrigation regimes, water use, and yields
per acre for each regime were obtained from experimental research trials (5;
6). The cost of pumping water was estimated using an irrigation variable-cost
model (7). Water use and crop yield estimates were used to calculate the per
acre cost and returns for each regime. The economic model, which uses a
linear programming procedure, selected the alternative irrigation regimes that
maximize returns to operator labor and fixed capital investment in land,
irrigation wells and equipment, and other farm machinery and equipment.
3
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has been archived. Current information is available from http://www.ksre.ksu.edu.
The economic model allowed for the irrigation of corn, grain sorghum, and
wheat on owned or rented land. Irrigated was with either the center-pivot or
gravity-flow system. Variable irrigation costs were different for each crop
because of differences in the amount of water pumped, irrigation system
efficiency, and/or fertilizer cost.
Analysis of the impact of rising natural gas prices was conducted by
changing the pumping costs in the crop budgets. The natural gas prices
considered were $.50/mcf and $1.00/mcf through $9.00/mcf in $1 increments.
For each natural gas price, the costs and returns of each crop and irrigation
regime were calculated. The model selected the combination of crops and the
irrigation regime that maximized returns.
To study the interrelationship between the effect of natural gas prices
and commodity prices, two commodity price levels were considered for each
natural gas price (Table 1). The low price level was the 1990 commodity loan
rates. The high price level was the 1990 effective target prices. Effective
target prices were the target prices adjusted for the reduced amount of
production on idled cropland required by participation in the government
programs.
Costs and Returns for Irrigation Regimes
Costs and returns were calculated for the nine irrigated corn regimes
with center-pivot and gravity-flow systems (Table 2). The estimated water use
and crop yield for each regime were based on research at the Branch Experiment
Station in Tribune, Kansas (5). The nine irrigation regimes were combinations
of irrigations at six stages during the crop preparation and growing season.
Irrigations during the preplant (PP), 18-inch plant height (18”), pretassel
(PT), silking (SK), bloom (BL), and kernel dent (DT) stages were considered.
Each regime had a different amount of water pumped and/or a different
irrigation schedule. One regime had one irrigation, four regimes had two
irrigations, one regime had three irrigations, two regimes had four
irrigations, and one regime had five irrigations. The gravity-flow had lower
irrigation system efficiency and, therefore, required more water to be pumped;
the center-pivot required less water to be pumped but more energy for pumping
because of higher system pressure. Crop yields and fertilizer requirements
were assumed to be the same for both systems.
Cost and returns for nine irrigated grain sorghum regimes with gravityflow and center-pivot systems are reported in Table 3. The nine irrigation
regimes were combinations of irrigations at five stages of the crop
preparation and growing season. Irrigations during the preplant (PP), growing
differentiation (GD), boot (BT), bloom (BL), and soft dough (SD) stages were
considered. One regime had one irrigation, four regimes had two irrigations,
three regimes had three irrigations, and one regime had four irrigations.
Grain sorghum yields and irrigation regimes were from experimental data from
the Tribune Branch Experiment Station.
Table 4 provides the cost and return estimates for the irrigated wheat
regimes. Wheat yields for the irrigation regimes and water use estimates were
from experimental plot data at the Garden City Branch Experiment Station (6).
4
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The seven irrigation regimes were combinations of irrigations at five stages
during the crop preparation and growing season. Irrigation during the
preplant (PP), winter (WI), jointing (JT), boot (BT), and heading (HD) stages
were considered. One regime had one irrigation, five regimes had two
irrigations, and one regime had three irrigations.
Costs and returns in Tables 2, 3, and 4 are based on the owner and
operator receiving full share. For tenant arrangements, which are included in
the model but not in these tables, the crop share and fertilizer costs are
reduced one-third. Fertilizer costs are based on the amount of fertilizer
necessary to replace the nutrients removed by the crops. Other variable costs
are from the Kansas State University Farm Management Guides (8).
To estimate the pumping cost for each natural gas price, a model
developed by Williams et al. (7) was used. The model requires data on number
of irrigated acres, system operating pressure, inches of irrigation water
pumped per acre per season, pumping water level, flow rate in gallons per
minute, percent pump efficiency, energy price, oil cost per gallon, pumping
plant maintenance cost, annual system repair and maintenance cost, hourly wage
rate, and the British Thermal Units (BTU) content of natural gas. To estimate
the costs associated with the different natural gas prices only the natural
gas price variable was changed.
Energy Use and Conversion
In western Kansas, 67 percent of the irrigation units are powered using
natural gas, 13 percent using diesel fuel, 4 percent using liquified petroleum
(LP), and 16 percent using electricity (9). In the southern half of the
region, 76 percent of the irrigation units are powered using natural gas (9).
Natural gas price was used as a proxy for energy price because it was the
major source of energy for irrigation in western Kansas. Results can be
applied to other energy types with the appropriate conversions.
Williams et al. (7) provided a method to convert natural gas consumption
per hour of pumping to electricity (kilowatts per hour), diesel (gallons per
hour), and LP gas (gallons per hour). The natural gas cost equivalent
multipliers are:
1 gallon per hour of LP = .1033 mcf/hr of natural gas,
1 gallon per hour of diesel = .1874 mcf/hr of natural gas,
1 KWH per hour of electricity = .0132 mcf/hr of natural gas.
For example, with a natural gas price of $4.00/mcf, the variable cost per hour
of pumping with natural gas is equivalent to one hour of pumping using LP gas
if the price of LP is $.41/gal ($4.00/mcf * .1033). Similar conversions can
be made for diesel and electric power sources:
Diesel
Electricity
$4.00 x .1874 = $.75
$4.00 x .0132 = $.053
5
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has been archived. Current information is available from http://www.ksre.ksu.edu.
Appendix A-4 provides the equivalent cost prices of the four types of energy
for the natural gas prices used in this study.
RESULTS
Costs and Returns for Irrigation Regime
The linear programming procedure calculated the combinations of crop
acreage and irrigation regime that maximized total net return for the
representative farm based on per-acre costs and returns (Tables 2, 3, and 4).
For corn, the most profitable regime used five irrigations, and the
increase in per-acre income from four to five irrigations was approximately
$3.00 (Table 2). The five irrigations were at preplant, 18-inch height,
pretassel, bloom, and dent stages. Income was about $4.00 per acre more for
the gravity-flow than for the center-pivot system. The savings from the
higher irrigation efficiency of the center-pivot system were more than offset
by the increased cost of pumping water at a higher pressure. These costs were
based on comparing systems already in use.
Grain sorghum showed less increase than corn in per-acre crop yield or
income as the number of irrigations increased (Table 3). The highest net
return per acre was with two irrigations at the preplant and growing
differentiation stages, but three and four irrigations were included in the
model. The income advantage for gravity-flow was approximately $3.00 per acre
over the center-pivot system for most irrigation regimes.
Irrigated wheat showed little yield response to the number of irrigations
(Table 4). The regime with irrigations at the preplant, winter, and heading
stages gave the highest per-acre net returns, with income of approximately
$11.00 more than with one irrigation. A greater response came from the timing
rather than from the amount of irrigation. With one irrigation, per-acre
income from wheat was nearly the same as that from grain sorghum, but both
were much larger than that from corn. As the number of irrigations increased,
wheat yield per acre increased relatively more than income. The value of the
increase in yield was largely offset by the added pumping cost of more
irrigation.
Effects of Natural Gas Prices
The economic model was used to estimate income changes, acreage
adjustments, and water pumped for the base representative farm for different
natural gas prices. To generalize the results from the representative farm to
other sized farms, results of the model are reported on a percent basis
(Figure 1). Irrigated farms similar in size to the representative farm would
likely have similar reductions in the percent of income, water use, and
irrigated acres if natural gas price increased.
6
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Effects on Income
Maximum income ($142,849 of gross revenue less variable production and
irrigation costs) occurred with a natural gas price of $.50/mcf and the
highest commodity prices. This maximum was the base used to calculate the
percent of the maximum income associated with higher natural gas prices and
low commodity prices. Changing either the natural gas price or commodity
prices had a large, but opposite, impact on income from irrigation. An
increase in the natural gas price from $.50/mcf to $6.00 reduced income 50
percent with high commodity prices and almost eliminated income from irrigation with low commodity prices. At these low prices, the profit from
each crop was reduced, but less for wheat and grain sorghum than for corn.
Income was about 60 percent higher with high commodity prices than with low
commodity prices. An increase in natural gas price from $.50/mcf to $7.00/mcf
with high commodity prices decreased income about 60 percent.
An increase in natural gas price from $.50/mcf to $7.00/mcf had about the
same effect as a decrease in commodity prices from the high to the low level.
With the low commodity prices, a natural gas price of $7.00/mcf eliminated
income from irrigation for the representative farm, and land use shifted to
nonirrigated wheat and grain sorghum. With high commodity prices, some
irrigation continued at the $9.00/mcf price.
Effects on Total Land Irrigated
The distribution of irrigated and nonirrigated crop acreage resulting
from an increase in the natural gas price and a decrease in the commodity
price levels was also converted to percentages with total cropland used as the
base (Figures 2 and 3). The representative farm had 37.1 percent of cropland
in nonirrigated crops and 62.9 percent in irrigated crops. This acreage
compare to the model results of 23 percent of cropland nonirrigated and 77
percent irrigated at the natural gas price of $.50/mcf and high commodity
prices.
High Commodity Prices. With high commodity prices and a natural gas
price of $.50/mcf, about 77 percent of total cropland was irrigated and most
of the irrigated land was in wheat (Figure 2). The percent of total cropland
irrigated remained unchanged through $7.00/mcf, after which the percent of
nonirrigated acreage increased to approximately 33 percent. Irrigated wheat
was the predominate crop (45 percent of the irrigated acreage) until the
natural gas price increased to $2.00/mcf; for prices above $2.00/mcf, wheat
acreage declined to 33 percent. Above the $2.00/mcf price, irrigated corn
acreage was reduced to zero. High commodity prices and low energy price are
needed for corn because of its high water requirement and input costs. Corn
production has higher variable costs per acre than wheat or grain sorghum, but
the higher yield and high price can offset the higher costs.
The effect of an increase in the price of natural gas on irrigated grain
sorghum acreage (Figure 2) was opposite that on corn. The lowest percentage
occurred at the lowest natural
gas price. At a $.50/mcf price, irrigated
—
7
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grain sorghum was about 15 percent of total cropland and about 20 percent of
total irrigated acres. Irrigated sorghum acreage was at a maximum at the
$4.00/mcf price, after which it declined as natural gas price increased.
Maximum irrigated grain sorghum acreage was nearly 45 percent of total acreage
and 58 percent of total irrigated acreage.
Wheat acreage remained at about 42 percent of total crop acreage and
about 50 percent of total acres irrigated for natural gas prices of $.50/mcf
to $2.00/mcf (Figure 2). Irrigated wheat acreage did fluctuate somewhat, with
acreage declining until the price of $5.00/mcf, then increasing until a
$7.00/mcf price, and thereafter declining again.
With a natural gas price higher then $2.00/mcf, grain sorghum and wheat
were the only crops irrigated, although their combined acreage declined for
prices above $7.00/mcf. Irrigated grain sorghum had the highest percent and
absolute acreage when natural gas price was between $2.00 and $4.00/mcf.
At low natural gas prices, 20 percent of the irrigated acres was corn.
As natural gas price increased above $2.00/mcf, the profitability of corn was
reduced because it is relatively more energy- and input-intensive and, thus,
was replaced by irrigated grain sorghum. Above $7.00/mcf, irrigated grain
sorghum decreased more than wheat because of higher energy requirements.
Low Commodity Prices. For low commodity prices and $.50/mcf, total acres
irrigated was about 78 percent of total crop acreage (Figure 3), which is
nearly the same as with high commodity prices. Irrigated acreage remained
about the same until a natural gas price of $2.00/mcf and, thereafter, showed
a steady decrease. With a natural gas price of $7.00/mcf, very little acreage
was irrigated.
Irrigated corn acreage did not occur with low commodity prices. Grain
sorghum was the major irrigated crop for all natural gas prices studied.
Grain sorghum had relatively high input costs and high yields. Grain sorghum
acreage was 48 percent of total acreage and 62 percent of total irrigated
acreage with the price of $.50/mcf but decreased as natural gas prices
increased. At a $7.00/mcf price, grain sorghum acreage was nearly zero.
Irrigated wheat acreage was about 30 percent of total acres and about 38
percent of irrigated acreage at $.50/mcf, maintained this level until a
natural gas price of $3.00/mcf, and then declined with higher natural gas
prices. At $5.00/mcf, wheat acreage was reduced to zero.
As natural gas prices increased at low commodity prices, crop acreage
shifted to nonirrigated wheat on fallow.
Effect on Water Pumped
Maximum water pumped occurred with the $.50/mcf natural gas price and
high commodity prices (Figure 4). This maximum was the base used for
calculating the percent of the maximum water use associated with higher
natural gas price or low commodity price.
8
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High Commodity Prices. With high commodity prices, an increase in the
natural gas price immediately reduced the amount of water pumped. Although
the amount of irrigated acreage was sustained, the amount of water pumped was
reduced as corn acreage was eliminated. As the natural gas price increased,
the amount of water pumped declined and at $4.00/mcf, the amount of water
pumped was approximately two-thirds of that pumped at $.50/mcf. The reduction
in water pumped was the result of fewer acres irrigated and less water per
acre as irrigated acreage shifted from corn to wheat and grain sorghum.
Low Commodity Prices. At low commodity prices and $.50/mcf, the amount
of water pumped was about 90 percent of that pumped at the high price level
(Figure 4). At $4.00/mcf, the amount of water pumped was less than half of
the maximum. Only grain sorghum was irrigated at a natural gas price above
$4.00/mcf.
IMPLICATIONS
If natural gas prices continue to rise relative to the price of
commodities, then irrigated agriculture will become less important in the
western Kansas economy. The potential exists from improved technology for
irrigation to become more efficient, thereby lowering pumping costs and
conserving water. However, in the short term, there are no production or
irrigation practices that can offset a sharp increase in the price of natural
gas or a sharp decline in commodity prices.
If natural gas prices continue to rise with no comparable increase in
commodity prices, irrigated corn in western Kansas will likely be replaced by
irrigated wheat and grain sorghum, accompanied by a dramatic decline in total
irrigated acreage. Increases in natural gas price affect corn acreage more
than grain sorghum or wheat acreage. Corn reaches its greatest return over
variable costs with four irrigations, whereas grain sorghum reaches its
maximum with two irrigations. The returns from corn are higher than from
grain sorghum but so is its use of natural gas and water. Thus, as natural
gas price increases, production costs increase proportionately more for corn
than grain sorghum. Production costs will increase even faster as more water
is used for corn and the water table declines.
An increase in commodity price level favors corn production more than
wheat or grain sorghum, because corn with four irrigations is a higher
yielding crop. With greater per acre production from corn, an increase in
commodity price levels results in return over variable costs rising faster for
corn than grain sorghum or wheat.
Higher natural gas price or lower commodity prices sharply reduce the
irrigator’s income, thereby reducing the amount of water pumped and the
overdraft of the Ogallala aquifer.
Water lift varies from over 400 feet in some southwestern counties to
less than 100 feet in northwestern Kansas (Tables A-1, A-2, and A-3). For
irrigated farms with water lift greater than 225 feet, an increase in the
natural gas price will decrease net income more than shown in Figure 1,
9
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decrease irrigated acreage (principally corn) more than shown in Figures 2 and
3, and reduce the amount of water pumped more than shown in Figure 4. For
irrigated farms with water lift less than 225 feet, the effects of a rise in
natural gas price would be less than those shown in Figures 1, 2, 3, and 4.
—
This study did not consider the long-term consequences that an increase
in the natural gas price might have on the decision to replace irrigation
wells and equipment. Consequently, the adjustments in acreage, water use, and
income will probably be greater than indicated by these results. With higher
natural gas prices, well or equipment repair or replacement and land
development will become less feasible. If an irrigator does not see a longterm justification for the investment or reinvestment in irrigation
technology, then irrigation will be discontinued.
SUMMARY
Production of irrigated crops is energy-intensive. Therefore, their
levels of production and income are sensitive to changes in energy and
commodity prices. Using natural gas price as a proxy for energy prices, this
study showed the potential effect of an increase in the price of energy on
income, acres irrigated, and water pumped. A model of a representative
irrigated farm in western Kansas was used to estimate the impact of increasing
energy and commodity prices.
With high commodity prices, irrigation can continue but acreage and water
use probably would be greatly reduced with a natural gas price of $7.00/mcf or
higher. With low commodity prices (as low as the government loan rate),
irrigation in western Kansas was essentially eliminated at a natural gas price
of $7.00.
An increase in the price of natural gas from $.50 to $4.00/mcf with high
commodity prices was estimated to reduce net income by 35 percent because of
the effect on pumping costs. As the natural gas price increased, a change in
the crop mix and water use per acre could partially offset the adverse effect
of that increase.
With high commodity prices, the number of irrigated acres was maintained
for natural gas prices between $.50/mcf and $7.00/mcf. Thereafter, irrigated
acreage decreased.
Irrigated corn acreage was adversely affected by increases in the natural
gas price, more so than grain sorghum or wheat. If the natural gas price
increased above $2.00/mcf, with high commodity prices, irrigated corn acreage
decreased sharply.
Irrigated wheat acreage changed relatively little as the natural gas
price increased with high commodity prices. Irrigated wheat acreage was
almost 40 percent of total crop acres and remained at that level throughout
the range of natural gas prices considered. Irrigated wheat and grain sorghum
acreage replaced irrigated corn as it became unprofitable. But with a natural
gas price above $7.00/mcf and with high commodity prices, irrigated grain
sorghum acreage also decreased.
10
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Some of the difference between the response in corn and wheat acreage can
be explained by considering the profit potential of each. Corn production
responds very well to full irrigation with relatively high yields, although
input costs are high. But the combination of high commodity price and high
yield provide higher profit for corn than wheat. Under a favorable price and
energy cost relationship, corn is the favored crop.
Grain sorghum does not have the profit potential of corn but it is
somewhat better than wheat. Thus, with high commodity prices, as natural gas
price increased, the percent of irrigated acreage in grain sorghum increased,
but began to decrease as the natural gas price increased above $4.00/mcf.
The amount of water pumped decreased with an increase in natural gas
price for all levels studied. With an increase in the price of natural gas to
$4.00/mcf, water pumped decreased about 35 percent with high commodity prices
and 45 percent with low prices.
An increase in commodity price can offset an increase in the price of
energy to a certain point. But as irrigation continues, the supply of water
continues to diminish, which lowers well yield and increases lift. Lower well
yield and increased lift exacerbate the adverse affects of an increase in
energy price.
11
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REFERENCES
1. Buller, O. 1988. Review of the High Plains Ogallala Aquifer Study and
Regional Irrigation Adjustments. Staff Paper No. 88-14, Department of
Agricultural Economics, Kansas State University, Manhattan.
2. Negri, D.H. and J.J. Hanchar. 1989. Water Conservation through
Irrigation Technology. Agricultural Information Bulletin No. 576,
Economic Research Service, USDA, Washington, DC.
3. 1987 Annual Report, Kansas Farm Management Association. Kansas
Cooperative Extension Service, Kansas State University, Manhattan.
4. Buller, O. H., J. R. Williams, H. L. Manges, and L. R. Stone. 1986.
Profitable Decisions for Groundwater Use for Irrigation in Western
Kansas. Report 258, Kansas Water Resources Research Institute, Kansas
State University, Manhattan.
5. Stone, L.R., R. E. Gwin, Jr., and M. A. Dillon. 1978. Corn and Grain
Sorghum Yield Response to Limited Irrigation. Journal of Soil and Water
Conservation 33:235-239.
6. Ohmes, F. and Paul Penas.
for Crops at Garden City.
University, Manhattan.
1977. Consumptive Water-Use Determinations
Water-Use Research Workshop, Kansas State
7. Williams, J. R., O.H. Buller, G.J. Dvorak, and H.L. Manges. 1988. A
Microcomputer Model for Irrigation Systems Evaluation. Southern Journal
of Agricultural Economics 20:145-152.
8. Dhuyvetter, K.C. and M.E. Nelson. 1986. KSU Farm Management Guides MF590, MF-583, MF-580, MF-582, MF-578, and MF-589. Department of
Agricultural Economics, Kansas State University, Manhattan.
Engineering
9. Thomas, J. G. 1982. 1982 Kansas Irrigation Survey.
Newsletter, Kansas Cooperative Extension Service, Kansas State
University, Manhattan.
10. Pabst, B. J. 1988. Water Levels and Data Related to Water-Level
Changes; Western and Southcentral Kansas. Open-File Report 88-342, U.S.
Geological Survey, Lawrence, Kansas.
12
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Table 1.
High and low commodity price levels
Commodity
High
Low
Wheat, $/Bu
3.86
2.44
Corn, $/Bu
2.60
1.96
Grain sorghum, $/Bu
2.45
1.86
Table 2.
Per-acre corn yield, water pumped, and variable costs by irrigation regime and system
Irrigation
Regime
Estimated
Yield
per Acre
Bu.
Water
Pumped
Ac. In.
Fertilizer
Cost
$
Pumping
Cost
$
Gravity-Flow
Other
Variable
Costs
$
Total
Variable
Costs
$
Income Less
Total Variable
Costs
$
System
PP
50
11.12
25.08
17.34
105.39
147.81
-17.81
PP+BT
93
20.85
46.72
27.70
105.39
179.81
61.99
PP+SK
107
20.66
53.82
32.81
105.39
192.02
86.18
PP+BL
96
20.45
48.21
31.88
105.39
185.48
64.12
18+BL
118
19.95
59.28
31.11
105.39
195.78
111.02
PP+PT+BL
132
28.74
66.34
44.81
105.39
216.54
126.66
PP+PT+SK+BL
144
35.02
72.37
54.59
105.39
232.35
142.05
18+PT+BL+DT
143
32.75
71.80
52.27
105.39
229.46
142.34
PP+18+PT+BL+DT
151
42.74
75.92
66.63
105.39
247.94
144.66
Center-Pivot
System
PP
50
8.50
25.08
19.04
105.39
149.51
-19.51
PP+PT
93
15.94
46.72
35.71
105.39
187.82
53.98
PP+SK
107
15.80
53.82
35.39
105.39
194.60
83.70
PP+BL
96
15.19
48.21
34.03
105.39
187.63
61.97
18+BL
118
15.26
59.28
34.18
105.39
198.85
107.95
PP+PT+BL
132
21.98
66.34
49.24
105.39
220.97
122.23
PP+PT+SK+BL
144
26.78
72.37
59.99
105.39
237.75
136.65
18+PT+BL+DT
143
25.64
71.80
57.43
105.39
234.62
137.18
PP+18+PT+BL+DT
151
32.68
75.92
73.20
105.39
254.51
138.09
l
Time of irrigation is abbreviated as follows: PP=preplant, PT=pretassel, SK=silk, BL=blister, 18=18-inch
plant height, and DT=dent stages.
Water pumped is based on 65 percent distribution efficiency.
3
Pumping cost is based on $2.00/mcf for natural gas, 225 feet water lift, and 900 GPM.
4
Water pumped is based on 85 percent distribution efficiency.
5
Income is calculated using $2.60 per bu.
2
13
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Table 3.
Per-acre grain sorghum yield, water pumped, and variable cost by irrigation regime and system
Irrigation
Regime
Estimated
Yield
per Acre
Bu.
Water
Pumped
Ac. In.
Fertilizer
Cost
$
Pumping
Cost
$
Gravity-Flow
GS Fallow
45
Other
Variable
Costs
$
Total
Variable
Costs
$
Income Less
Total Variable
Costs
$
System
8.40
39.10
47.50
62.75
PP
106
10.21
53.46
16.11
76.38
145.95
113.75
PP+BT
117
18.46
59.49
29.13
76.38
164.00
122.65
PP+BL
115
18.34
57.79
28.94
76.38
163.11
118.64
PP+SD
114
18.22
57.79
28.94
76.38
162.46
116.82
PP+BT+BL
121
27.20
60.98
42.93
76.38
180.29
116.16
PP+BT+BL+SD
126
30.21
63.26
47.69
76.38
187.27
121.43
PP+BT+SD
127
27.09
63.82
42.76
76.38
182.96
128.19
PP+GD
128
18.48
64.28
29.16
76.38
169.82
143.78
PP+GD+BL
134
27.57
67.37
43.51
76.38
187.13
141.17
Center-Pivot
System
PP
106
7.74
53.46
17.34
76.38
147.18
112.52
PP+BT
117
14.12
58.49
31.62
76.38
166.49
120.16
PP+BL
115
14.02
57.79
31.41
76.38
165.58
116.17
PP+SD
114
13.93
57.33
31.20
76.38
164.91
114.59
PP+BT+BL
121
20.80
60.98
46.59
76.38
183.95
112.50
PP+BT+BL+SD
126
23.11
63.25
51.76
76.38
191.39
117.3l
PP+BT+SD
127
20.71
63.82
46.41
76.38
186.61
124.54
PP+GD
128
14.13
64.28
31.65
76.38
172.31
141.29
PP+GD+BL
134
21.08
67.37
47.22
76.38
190.97
137.93
1
2
3
4
5
Time of irrigation is abbreviated as follows: PP=preplant, BT=boot, BL=one=half bloom, SD=soft dough, and
GD=growing point differentiation stages.
Water pumped is based on 65 percent distribution efficiency.
Pumping cost is based on $2.00/mcf for natural gas, 225 feet water lift, and 900 GPM.
Water pumped is based on 85 percent distribution efficiency.
Income is calculated using $2.45 per bu.
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Table 4.
Irrigation
Regime
Per-acre wheat yield, water pumped, and variable cost by irrigation regime and system
Estimated
Yield
per ac
Bu.
Water
Pumped
$
Fertilizer
Cost
$
Pumping
Cost
$
Other
Variable
Costs
$
Total
Variable
Costs
$
Income Less
Total Variable
Costs
$
Gravity-Flow System
Wheat on
Fallow
40
PP
55
13.6
34.02
PP+WI
53
17.06
PP+MI
55
PP+HD
37.75
41.23
113.17
21.46
32.83
88.31
123.99
32.78
26.93
32.83
92.54
112.04
17.91
34.02
28.26
32.83
95.11
117.19
49
19.45
30.26
30.69
32.83
93.78
95.36
PP+BT
60
20.83
37.21
32.68
32.83
102.92
126.68
PP+JT
60
21.43
37.21
33.82
32.83
103.86
127.74
PP+WI+HD
62
20.95
38.24
33.07
32.83
104.14
135.18
8.40
Center-Pivot
System
PP
55
10.4
34.02
23.30
32.83
90.15
122.15
PP+WI
53
13.05
32.78
29.23
32.83
94.84
109.74
PP+MI
55
13.64
34.02
30.67
32.83
97.52
139.02
PP+HD
49
14.87
30.26
33.31
32.83
105.72
125.88
PP+BT
60
15.93
37.21
35.68
32.83
105.72
125.88
PP+JT
60
16.39
37.21
36.71
32.83
106.75
124.85
PP+WI+HD
62
16.02
38.24
35.89
32.83
106.96
132.40
l
Time of irrigation is abbreviated as follows: PP=preplant, WI-winter, MI=milk, HD=heading, BT=boot, and
JT=jointing stages.
Water pumped is based on 65 percent distribution efficiency.
3
Pumping cost is based on $2.00/mcf for natural gas, 225 feet water lift, and 900 GPM.
4
Water pumped is based on 85 percent distribution efficiency.
5
Income is calculated using $3.86 per bu.
2
15
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Figure 1.
Changes in the percent of maximum income caused at
different natural gas prices and high and low
commodity prices
Figure 2.
Distribution of total acres per crop at different
natural gas prices and high commodity prices
16
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
APPENDIX
Table A-1:
Depth to water as reported in 1988 for some irrigation test wells
and percentage accumulated by depth classification and by county
No. Test
Wells
Accumulated % of wells of less than designated depth
Rep orting 50ft l00ft 150ft 200ft 250ft 300ft 350ft 400ft
County
Southwest Region:
Finney
73
8
39
93
100
Ford
64
29
57
85
98
100
Grant
41
22
63
Gray
44
9
29
76
98
100
Hamilton
35
54
60
74
85
Haskell
31
6
Hodgeman
27
18
55
Kearney
30
23
Meade
28
Morton
85
100
94
97
100
19
45
64
97
70
77
81
96
100
43
76
86
93
100
28
39
64
96
100
38
3
40
66
90
100
Seward
35
3
9
29
63
97
Stanton
36
3
14
59
92
100
Stevens
41
10
51
88
95
94
100
West Central Region:
Gove
19
26
58
100
Greeley
18
6
17
61
Lane
18
61
100
Logan
12
8
25
75
100
Ness
12
83
100
Scott
37
22
87
100
Wallace
25
4
8
48
88
Wichita
40
3
19
78
100
60
100
100
100
Northwest Region:
Cheyenne
45
18
29
51
Decatur
33
61
79
100
Graham
22
27
59
100
Norton
10
30
70
100
Rawlins
33
43
46
73
88
Sheridan
50
20
26
82
100
Sherman
64
3
9
53
97
100
Thomas
Source: 10
57
7
23
74
98
100
18
100
100
100
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Depth to bedrock as reported in 1988 for some irrigation test
wells and percentage accumulated by depth classification and by
county
Table A-2:
No. Test
Wells
County Reporting
Southwest Region:
Accumulated % of wells of less than designated depth
l00ft
200ft
300ft
400ft
500ft
Finney
61
10
33
48
71
88
Ford
22
5
50
95
95
100
Grant
39
3
39
85
100
Gray
41
2
22
83
83
100
Hamilton 31
58
71
100
5
35
Haskell
Hodgeman
20
600ft
700ft
100
95
100
100
4
75
100
Kearney
29
10
31
66
83
100
Meade
26
4
8
31
65
96
Morton
22
41
64
91
96
100
Seward
28
7
57
82
100
Stanton
29
27
62
100
Stevens
31
6
16
48
90
100
5
3
6
West Central Region:
Gove
5
20
100
Greeley
17
12
59
Lane
19
11
100
6
33
67
100
89
100
22
89
80
100
69
Logan
100
Ness
Scott
36
Wallace
27
Wichita
40
7
93
Northwest Region:
Cheyenne 13
46
54
Decatur
31
61
100
Graham
13
15
77
100
34
38
62
97
100
Sheridan 36
17
36
97
100
61
2
5
69
100
Thomas
47
Source: 10
4
25
69
100
100
Norton
Rawlins
Sherman
19
100
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Table A-3:
Saturated thickness reported in 1988 for some irrigation test wells and percentage accumulated
depth classification and by county
No. Test
Wells
Counties
Reporting
Southwest Region:
Accumulated %-age of reporting wells with less than designated depth
425ft
375ft
225ft
275ft
325ft
175ft
75ft
125ft
25ft
475ft
Finney
58
9
28
38
43
57
66
83
88
Ford
21
5
29
85
90
95
95
95
100
Grant
30
13
40
74
97
100
Gray
41
20
40
84
84
94
96
Hamilton
26
80
88
96
100
Haskell
18
28
67
100
48
52
61
91
100
5
10
19
59
82
95
100
63
63
94
100
4
31
58
73
77
100
46
57
75
100
27
Hodgeman
4
25
75
100
Kearney
23
9
40
44
Meade
22
Morton
16
Seward
26
Stanton
20
Stevens
28
6
5
25
15
57
30
50
80
100
4
11
18
25
West Central Region:
Gove
5
80
100
Greeley
17
6
94
100
Lane
19
5
95
100
60
100
88
97
Logan
5
Ness
Scott
33
18
100
100
100
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.
Table A-4.
Natural
Gas
Price
$/mcf
Energy price conversion
Diesel
$/gal
Equivalent Price Conversion
Propane
Electricity
$/KW
$/gal
.50
.09
.05
.007
1.00
.19
.10
.013
2.00
.37
.21
.026
3.00
.56
.31
.039
4.00
.75
.41
.052
5.00
.94
.52
.065
6.00
1.12
.62
.078
7.00
1.31
.72
.091
8.00
1.50
.82
.104
9.00
1.68
.93
.117
22
This publication from the Kansas State University Agricultural Experiment Station and Cooperative Extension Service
has been archived. Current information is available from http://www.ksre.ksu.edu.